We would like to inform you about some current measures to support entrepreneurs in connection with the coronavirus pandemic.
STATE AID PROGRAMME IN THE FIELD OF BUSINESS RENTALS
The government has approved the so called “COVID – RENT” support programme for entrepreneurs, which consists in the partial refund of the rent for business premises. The government-approved conditions are now awaiting notification to the European Commission, so the information below is only preliminary.
The program aims at entrepreneurs who were forced to suspend or significantly reduce business activities in their facilities in the period between March 13th and June 30th. These entrepreneurs are able to apply for a refund of up to 50 % of the rent for the period from April to June 2020. However, a condition for this is that the owner of the premises agrees to a 30% discount on the rent. The maximum amount of support is CZK 10 million for the entire three-month period. The tenant will thus in effect pay 20 % of the agreed rent and 50 % will be refunded by the state.
In case the owner of the rented premises is the state or another public entity, after approval of the application, 80 % of the agreed rent will be refunded automatically, so the entrepreneur will also effectively pay only 20 %.
Please note that this is a refund, i.e. the tenant must first pay 50% of the rent for the period in question (80 % if the lessor is the state) and the rent will be later refunded. If the rent amount is subject to VAT, only the net rent is subject to refund, not the amount of VAT paid.
POSTPONEMENT OF SOCIAL SECURITY PAYMENTS
At its session yesterday, the Senate approved the possibility of postponing the payment of social security for employers. Employers will have the option to pay the employer part of the social security and state employment policy contributions for the period from May to July 2020 within an extended deadline until October 20th, 2020. In such case, the employer will still be obliged to pay a penalty for late payment, however, such penalty will be reduced by 80 %, if the payment is made within the extended deadline. According to the Minister of Labour and Social Affairs this is not a general deferral of insurance contributions, but rather a loan that is supposed to help the businesses affected by the COVID-19 epidemic with their cash flow.
In the next few days we can expect the act to be signed by the president and promulgated in the collection of laws.
We will keep you informed of further developments. In case of any queries do not hesitate to contact us.